CERRITOS, CA — When vehicle dealers Coleman Hoyt, Bill Cunningham, and Phil Hartz got together at a diner five years ago, they were naturally talking about ways to sell more vehicles to limousine operators.

The trio came up with an umbrella structure of a coast-to-coast sales partnership that eventually could become a one-stop shop for all types of chauffeured fleet vehicles. While such a concept is not new, applying it to a small, niche industry like chauffeured transportation was a first-time, unique challenge.

Fleet Grand CentralThis year, the Acton/SoCal Penske Professional Vehicles network reached a milestone with a 25% market share of all chauffeured vehicles sold in the U.S., up from 20% in 2015, 15% in 2014, and 10% in 2013, says Hoyt, the co-CEO of Acton/Socal Penske and President of the Acton Chrysler dealership group in Acton, MA.

“We’ve also unified marketing and advertising under one cohesive umbrella logo and name,” Hoyt says. “I think the ability to present ‘the supermarket of livery cars’ has given us a very nice posture where we have all the brands at our disposal and we have professional people who can talk about all vehicles on a coherent, consistent basis.”

Altogether, Acton SoCal Penske draws upon the resources of multiple dealerships and owners and managers with varied titles. Those would include Hoyt’s Acton Chrysler Dodge Jeep Ram dealership group in Acton, MA; the Sentry West Lincoln in Shrewsbury, MA, and Sentry Ford Lincoln in nearby Medford, both led by President Chris Lemley; Acton Fleet Sales, a longtime Lincoln livery dealer that evolved from local dealerships in Acton led by Cunningham, the vice president and East Coast director of Acton/SoCal Penske; and the Penske Cadillac and Penske Chevrolet dealerships in Southern California, owned by Phil Hartz and Roger S. Penske Jr. Hartz works with Greg Maddock and Jim Mayfield, the West Coast sales directors of Acton/SoCal Penkse.

Acton/Socal Penske consists of affiliated, fleet-minded dealerships under one marketing roof similar to a trade association, Hartz explains. The four core dealership groups that comprise Acton/SoCal Penkse can deliver purchased vehicles via a wider network of cooperating dealerships that make courtesy deliveries to operators based beyond the territorial reach of the four groups. The network also enables their fleet customers to get warranty maintenance done on vehicles through hundreds of dealerships nationwide.

“When we sell a car, it’s the member dealer selling the car through the association,” Hartz says. The dealerships’ personnel are capable of selling vehicles for different brands. “Our people are licensed to cross sell each other’s vehicles.”

Frontline SalesOne advantage the network provides is a sales team that can advise an operator on how to customize a fleet, and then work out the most sensible combination and financing of vehicles. Operators can choose to acquire an entire chauffeured fleet, ranging from sedans to SUVs to large custom-converted vans.

Cunningham, who has been selling chauffeured vehicles since 1989, says he’s never seen a time in the industry with so many diverse product offerings. “These are some of the lowest vehicle prices in years,” says Cunningham, who can recite just about any chauffeured vehicle price, spec, rebate, or fleet trend off the top of his head.

The economies of scale provided by Acton/SoCal Penske coupled with lower pricing trends among vehicle makes/models are leading to some robust deals for operators, he says. A Lincoln MKT Town Car, for example, can be had for about $38,000, down from $43,000 last year. Top sellers among livery operators are the Chevrolet Suburban SUV and the Cadillac XTS sedan, with the new 2017 Lincoln Continental hitting sell-out status right of out of the gate, he adds.

“Finally, there’s a Lincoln where you sit in the back seat and it feels like you’re in a luxury car,” says Cunningham, adding the Continental’s 500A livery package includes reclining rear seats, tri-zone climate control, and heated and cooled seats. The first production batch of Continental sedans is sold out with second-batch orders now pending for units that cannot be delivered until February or March of 2017.

Acton SoCal Penske West Coast sales director Greg Maddock, co-CEO Phil Hartz, and West Coast sales director Jim Mayfield lead West Coast sales services for the dealership partnership. The team is pictured at the Penske Chevrolet dealership in Cerritos, CA, a source of Chevrolet Suburban SUVs and GM vehicles for limousine operators nationwide. (LCT photo)

Brand RaceThe wide selection of sedans and emergence of the Suburban, Escalade, and Navigator in the SUV market has led to more options and inter-brand competition, resulting in lower prices, Hoyt says. “We pass along our volume savings to the end user. We don’t try to hold arbitrarily high margins. We set a transaction price for the industry and offer a heavily discounted price to everyone.”

The trend in vehicle purchasing over the last five years has been toward livery operations preferring more than one primary make and model, Hartz says. “Unlike 2010 and 2011, there are now significant choices for operators to experiment with. That’s what Acton/SoCal Penske is designed to accommodate. The portfolio meets the different needs of customers.”

As an example, sales of the CT6 sedan, which has about three more inches of rear seat legroom than the XTS livery sedan, got off to a slow start this year, but should be picking up now that Cadillac has added a rebate program and a livery warranty of 3yrs/150,000 miles, Maddock says.

One benefit of offering multiple vehicle brands is a range of prices suitable to different fleet budgets. Unlike the era of the one-size-fits-all Executive-L Town Car, many livery sedans now have different package levels and powertrains. On the high end, based on content, the livery CT6 can transact between $56,400 and $51,000, while the Lincoln Continental sell for $46,750 to $48,750. In the middle range, the XTS livery sedan costs from $40,000 to $42,000 and the MKT Town Car, $38,000 to $39,000. In the lower price ranges, based on equipment, the Lincoln MKS now costs an operator $32,500 to $33,500 and the Chrysler 300 livery sedan has a package that sells for $29,995.

Fleet vehicle sales growth in the industry stems from multiple factors, Hartz says: A gradual end to the Great Recession and a sustained rise in economic performance, cycling out of older limousine fleet vehicles, the variety of livery product lines, and the overall improved financial condition of the industry. Despite more company sales and mergers in the last few years, the market sees larger companies buying more vehicles, he says. “The demand for (client) rides is still going up.”

No TNC TroublesActon/SoCal Penske sells only used vehicles to TNC operators, who tend to prefer smaller, compact new cars, such as the Chevrolet Cruze.

“Uber drivers do not buy luxury vehicles from us,” Hartz says. TNC drivers see how much they have to spend on insurance, gas, and a car payment, and it spurs many of them to either purchase or rent lower cost vehicles to gain access to the ‘ridesharing’ transportation world. “Uber and Lyft seem to be focusing on the cab segment.”

“We see the TNCs changing rapidly,” Hartz adds. “They’re having trouble getting into the corporate space, which clearly prefers the security of using established limousine companies.”

As the leading vehicle sales engine in the industry, Acton’s principals can get an accurate view of the health of the industry versus TNCs.

“Traditional operators are in a great spot now,” Hartz says. “They have profitable operations, new fleets, the latest safety technology, and a higher standard of customer service. They can provide the whole experience through which the industry is able to differentiate itself.”

New MarketAs a result, the Acton/SoCal Penske network has grown from three to 12 full-time sales, support, and finance employees. Among them, Jim Mayfield is working on accommodating the next anticipated market demand for ADA vehicles, reflecting the increased requirements from governments for transportation of disabled passengers. Acton SoCal Penske is actively exploring the development of specific luxury-level ADA conversion vehicles, which would include vans and minivans.

“Five years ago, we didn’t have the ability to thoughtfully recommend anything except what we each had,” Hoyt says. “Now that we have a full line up we can match proper equipment to every livery operator with greater precision.”

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